The 2016 Indemnification Issues

What would you do if your main source of income for your business suddenly stopped, and no-one was able to indicate when or if it might recommence? 

Since the middle to late 2016 the investigative industry in New South Wales and Victoria has experienced a severe reduction in workload. Some NSW investigators I have spoken to blame it on the Four Corners episode which aired in August 2016, whilst the Victorian based investigators blame the recent Worksafe Victoria review by the Ombudsman.

Whatever the cause, Private Investigators in both New South Wales and Victoria have suffered a drought in the insurance work arena, with some beginning to drive for Uber, or even leaving the industry in the hunt for more stable work. 

Why am I blogging about this? Apart from the lack of work having an impact on my business and family, it begins a discussion concerning the decisions and actions of others and how they can influence the lives of those further along the supply line. (It might be worth noting here that we do not conduct investigations into police or military members due to possible perceived conflicts of interest).

Whilst I don't blame insurance companies for my own failings to diversify my income sources, that is a lesson I have learnt the hard way, I am surprised about the spontaneous decisions made by larger companies with shareholders in reaction to excited media attention. It is also interesting that the spread and range of the cessation of claim investigations included more than the PTSD claims highlighted by the TV program. The entire claim checking process appeared to turn off as the relative companies sought to reduce adverse attention. The downturn did not only affect small investigative firms like mine. Larger companies with multiple office staff, salaried supervisors and investigators were required to reduce their staffing levels in line with the reduction in work.

So what next?

Investigators have left the industry, gone out of business, and reduced the size of their staff numbers. What happens when the work picks up? Will we be left with the experienced investigators who were smart enough to put funds away for rainy days? Or will the depth of knowledge be lost as the larger companies prefer the newer, cheaper investigators who may not have the skills but allow the companies larger profit margins?

How do you tell the difference between good and bad investigators? 

 
 
"if you read the legislation carefully surveillance operatives don't actually need to be licensed because they aren't actually conducting enquiries" - (false claim by an "experienced" investigative company owner.)
 

Firstly, start with their website. Good investigator companies will have their private investigator license details clearly displayed. They will not being trying to hide anything and will be up-front and honest from the initial contact. This is especially true for companies based in, or advertising in, New South Wales. The NSW Police website allows you to check on their licence status by inputting a licence number. Can you conduct these checks without actually speaking to anyone at the company? The legislation actually requires PI firms to display their license details on any advertising and websites they operate. Would you trust any company to conduct your investigation if they do not make it easy for you to check whether they are licensed? We recently had a conversation with a large investigative company based in Sydney. During this conversation we were told "if you read the legislation carefully surveillance operatives don't actually need to be licensed because they aren't actually conducting enquiries". Let me tell you, any investigator conducting surveillance without being appropriately licensed is likely to be arrested and charged with the offence of stalking. 

Secondly, have they been operating under their business name long, or have they changed their business name several times? There have recently been a number of companies in Victoria who have gone out of business owing sub-contractors and clients money, before starting other companies and repeating the process. Simple checks by you might save you money and anguish later.

Thirdly, are they insured with both professional indemnity and public liability insurance?  This is a simple step which further helps to separate the professional investigators from the rest.

 

So, to wrap up the post, there are a couple of lessons learnt from our recent experiences. 

1 - Diversify income streams. Don't rely on one source of income because it is easy and appears to be constant.

2 - Licensing and regulations are important to governance of private investigator businesses. Asking some simple questions before engaging investigators can save you time and money later.

 

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